Great.... so clearly we have a problem with something that is loading for your original user. Next thing to try is going to the System Preferences > Accounts and make a note of all the login items for your user. Then remove them all. Reboot and see if the emulator works. If so, then one of those items was the problem. It's just a matter of re-adding them one at a time to see what the culprit was.

If removing those doesn't do the trick, then something is foul in your Library. We'll tackle that last if need be.

That was it. I had four login items. I removed them and it works. I don't know where those login items went...oops. Oh well though, it works and I don't really need those login items anyway. They were iTunes Helper, Quicken, Adobe CS3 updater, and Microsoft AU.

I have a feeling it was the Quicken. Anyway, thanks. Little things like that can really eat at me.